The government has regularly given assurances that they will curb top pay by giving shareholders the power to veto excessive pay packages. But the pay of the average FTSE 100
Chief Executive has increased by nearly £500,000 in the last year. FTSE 100 bosses are now paid an average £4.72 million, equivalent to hourly pay of well nearly
£1,200. It takes them just around
22 hours work to surpass the UK average earnings of £27,200.

One month before the UK General Election in May 2015 David Cameron, warming up for a post prime ministerial career as a game-show host, announced it was "Money Back Monday". On that first day of the 2015-16 tax year Cameron declared: "Today is a big day for our country. It's 'money-back Monday' - a day when, quite simply, hard working taxpayers get to keep more of their own cash. A whole host of changes to our tax, benefits, pensions and savings systems come into effect today."Promising** a handout to the nation one month before the General Election clearly didn't do him any harm. But who actually took the money Cameron promised to give back? We get an insight by looking at data from the Office for National Statistics (ONS) annual report on "The Effects of Taxes and Benefits on Household Income". Comparing data from financial years ending in 2010 and 2014 (the report for 2015 won't be out until June 2016), we see the personal tax burden actually increased during the last Conservative led coalition government.How is this possible? Surely the Tories have been lowering some income tax rates and raising allowances? Yes they have. But they take back significantly more than they give via other taxes.

Because the poorest pay most of their taxes as Indirect Tax they were hit hardest by Tory tax rises. Nonetheless, the richest also paid a higher rate of tax in 2014 than they did in 2010.

Indirect and Direct Taxes for richest and poorest [click on picture for better view]

How do the Tories manage to be seen as the "party of low taxation"? They do it by saying it with such confidence people believe it is true without checking. In a speech in March 2014, David Cameron said:"We believe in helping people keep more of the money they earn. It’s the right thing to do. Let’s be clear: there is no such thing as government money. It’s your money – taxpayer money. It’s not my money, not George Osborne’s money, not the government’s money - it’s your money. Hard-working people’s money."In the same speech Cameron went on to promise: "A bit of extra cash that can help a Dad afford those trainers for his son or help a Mum celebrate her daughter’s birthday with a meal out."The reality is those who depend on a tax reduction to buy trainers and pizza for their children were far less able to afford those treats. Even those at the other end of the income scale found themselves with more tax taken from what they have to invest or to spend on a whim.

The Conservatives warn us the Labour Party can't be trusted with the UK's economy and security. And yet five years of a Tory led government brought higher taxes, increased national debt, cuts to the military, and cuts to the police. The real puzzle in Britain is not what the Labour Party has to do to be trusted. It is what the Tories have to do to be distrusted.[** Cameron's promise of "money back" in this April 2014 speech was based on an analysis the Tories hadn't published. Sir Andrew Dilnot of the UK Statistics Authority complained about this in a letter that stated:"Reference to the analysis was made in the Conservative Party press release, but the analysis has not been published and is neither available to all other parties nor to members of the public. We regard this as unsatisfactory because of the significance that we attach to the principle of equal access to statistics and underlying analysis."]

John Cridland, director general of the CBI and the most
senior voice of British business, has blasted the government’s performance on
the “green economy”, warning that UK companies will lose out on hundreds of
billions of pounds in opportunities for overseas exports if ministers do not
reverse direction. Cridland said the UK’s green economy alone was already worth
£120bn a year, and that between 2010 and 2013, the green economy grew at more
than 7% a year, compared with less than 2% a year for the UK economy as a
whole. The green economy is a new “emerging market”, comparable to the existing
emerging economies of China and India, according to the business leader, but
the UK’s previous success in capitalising on such opportunities is at risk:
“Over many years, the UK has built up real credibility on climate leadership
and low-carbon investment. This is hard won, but easily lost.” Since coming to
power, the Conservatives have aimed a series of blows at the green economy,
including: slashing support for solar power; effectively ending the building of
new onshore wind farms; scrapping the flagship “green deal” insulation scheme,
with no replacement; and part-privatising the Green Investment Bank. There has
also been a stream of rhetoric from senior ministers that has attacked green
aims, including pledges that the UK would hang back on cutting emissions,
compared with other major economies. GUARDIAN

Low prices, high pay!
Lidl becomes first supermarket to offer Living Wage and vows not to increase
cost of goods to fund it

It's already known for its low prices – now Lidl says it’s
going to pay the highest supermarket wages. The discount chain will be the
first grocer to adopt the so-called Living Wage for its staff. And it has vowed
not to push up the cost of goods to fund the £9million cost of the increase. Lidl
will give workers at least £8.20 per hour across Britain – some £1 more than
the minimum announced by George Osborne in the summer. The firm, which has 620
stores and a 4.1 per cent share of the UK grocery market, will pay £9.35 per
hour in London. It represents an average wage increase of £1,200 per year, with
more than half of the grocer’s 17,000 workforce of all ages benefiting from the
rise. In July, the Chancellor stunned firms by revealing plans to introduce
what he dubbed a ‘National Living Wage’. From April 2016, firms will have to
pay all workers over 25 at least £7.20 an hour, up from the current national minimum
wage of £6.50. It will rise to £9 by 2020. However, the move has been
controversial. Last week, Costa Coffee faced a backlash for threatening to hike
the price of a cappuccino to pay for the cost of higher wages. Pub chain JD
Wetherspoon said the National Living Wage would put ‘financial pressure’ on the
already-strained sector. And clothes retailer Next claimed they will have to
increase prices to pay for the rise in staff costs. But German-owned Lidl,
which made record sales of £4billion last year, said it would absorb the wage
increase itself. It’s UK boss Ronny Gottschlich said employees will be amongst
the best paid in the supermarket sector. DAILY MAIL

New NHS contract will
worsen shortage of junior doctors

The warning comes from the trainee doctors group (ATDG) of
the Academy of Medical Royal Colleges, which represents the professional
interests of all the UK’s 240,000 doctors. It puts extra pressure on Hunt to
reconsider his decision to impose new terms and conditions on the NHS’s 53,000
junior doctors in England, which has sparked angry protests. The new contract
will extend the normal working week in which doctors can be told to work their
48 hours from 7am-7pm Monday to Friday to 7am-10pm Monday to Saturday. Many
will also see their pay cut because they will no longer be paid overtime for
working evenings and Saturdays. The ATGD claim the new contract will deepen
existing shortages in areas which already require doctors to work a lot out of
hours, such as A&E units, acute medicine, children’s services and general
practice. Recent official NHS figures, covering the arrival of the latest round
of new junior doctors in August, show that acute medicine was still short of
48% of the new recuits it needed, as was renal medicine (48%) and geriatrics
(14%). The proposed changes have already raised fears of an exodus of
expensively trained medics to other countries, such as Australia, after figures
showed 1,644 young doctors had already began the process of applying for the
certification needed in just three days last week. GUARDIAN

Treasury Select Committee (TSC) chairman Andrew Tyrie MP is
demanding to see what advice the government received from UK Financial
Investments (UKFI) - the agency that manages the public stake in bailed-out
banks - before it started to sell off shares in Royal Bank of Scotland last
month. UKFI sold around 600m shares, reducing the government's 79 per cent
stake in the lender. The shares went on sale at a £13bn loss. Tyrie, who has
been chairman of the TSC since 2010, noted that Osborne has since commissioned
"an independent report from Rothschild to verify the work of its own
advisers", saying this "could be taken to cast doubt on the quality
of this advice". Tyrie said: "UKFI exists to develop and execute an
investment strategy for disposing of the government’s shares in RBS and Lloyds
in a way that protects value for the taxpayer. This is its overarching
objective, set out in its framework document." It follows concerns about
why UKFI had paid Goldman Sachs and UBS just £1 for services that otherwise
would have brought in millions for the investment banks, a fact revealed
earlier this month. CITY AM

Housing minister Brandon Lewis said the government aimed to
see one million new homes in England over this Parliament. But the National
Housing Federation (NHF) said about 245,000 new homes were needed each year in
England. Figures from 326 councils showed only 457,490 were built between 2011
and 2014. The NHF estimated 974,000 homes were needed during that period. Gill
Payne, NHF director of policy and external affairs, said: "Skyrocketing
rents and ballooning house prices are eating up more and more of people's wages
and forcing people out of their local communities or into smaller, lower
quality housing... We haven't built enough homes in this country for decades.” In
2012, the government introduced changes to the National Planning Policy Framework,
aimed at making the planning process simpler and quicker. But numerous other factors
have also been blamed. A shortage of land has also been cited by homelessness
charity Shelter, while criticism has been levelled at developers who build
slowly rather than progressing quickly. By keeping the number of new homes
available at any one time low, the price of those houses can be kept high, said
Matthew Pointon, property economist at Capital Economics. A shortage of skilled
labour, a big drop in the number of councils building new homes and regulations
restricting housing associations have also been blamed. Shelter's chief
executive Campbell Robb added: "We are past the time for another grand
statement of ambition. To give ordinary families back the hope of a stable
home, we need to see investment and a comprehensive plan that can actually get
these homes built."

The Conservative victory in the 2015 General Election has rightly been described by just about everyone as "stunning". However with the continuous repetition of this accurate assessment it is gradually being forgotten why it was stunning. And it has been forgotten what the immediate result of being stunned is.The victory was stunning not because of its size, but because it happened at all. In fact Cameron's victory was smaller than any in recent decades except for his own performance in 2010, which forced him into coalition with the Liberal Democrats.

a) About the same number of voters shifted from Labour to Conservative as shifted from Conservative to Labour. Effectively cancelling each other out.

b) About the same number of voters shifted from Conservative to UKIP as shifted from the LibDems to the Conservatives. Effectively cancelling each other out in terms of number of votes, though not in terms of number of MPs.

David Cameron could well have quoted Henry V's not so famous speech in the Shakespeare play of that name. Not "Once more unto the breach dear friends, once more..", but the one at the end of the Battle of Agincourt:

"O God, thy arm was here;

And not to us, but to thy arm alone,

Ascribe we all! When, without stratagem,

But in plain shock and even play of battle,

Was ever known so great and little loss

On one part and on the other? Take it, God,

For it is none but thine!"

Though instead of "God", the credit would go to the "Electoral Arithmetic". The vast migration of voters (pictured in the IPPR graph below) crossing political borders to find a better life resulted in gifting the election to the Tories. The large number of votes the Tories lost to UKIP did not cost them any seats, nor gain UKIP any. While the small number of votes the Tories gained from the LibDems won them 27 additional MPs.

Many have forgotten what "stunning" and "being stunned" actually mean. The thing about stunned people is they tend not to see clearly. Jeremy Corbyn becoming leader of the Labour Party elicited terror from the Left and glee from the Right. Both were convinced that the Conservative's stunning victory proved the Labour Party needed to move Right in pursuit of electoral success. Both concluded a Leftier Corbyn-led party would hand the Tories power for a decade.In stark contradiction to this belief, the IPPR report showed Labour would actually be noticeably less attractive to voters if it moved to the Right. Moving further to the Left would apparently make Labour marginally more popular.

What about the great tide of voters when the angry wind for UKIP and against the LibDems changes? Will it recede, and where will it recede to? The graphs below relate only to constituencies lost by the LibDems in the 2015 General Election:a) Tories to UKIP:Traditional Tory voters who moved to UKIP will be faced with months of derision from their former party. They will be told insisting on leaving the EU is a task for fools and buffoons. Will they return in the 2020 general election to the Tory party having been treated so scornfully by it? b) Lib-Dems to Tories:The Liberal-Democrat party conference hall, in September 2015, echoed with promises of a great come-back. This is not so impossible. Now traditional Lib-Dem voters know that not voting Lib-Dem to punish the party for being too Tory, they ended up with actual Tories as their MPs. Perhaps next time they will be more careful what they vote for. With Labour a distant third in many of these lost seats, the voters would have to return to the Lib-Dem fold to eject their Tory MP. The Lib-Dems are not without consolation in their 2015 desolation, and have 20,000 extra shepherds to herd their lost sheep back into their fold:

The Conservative victory in 2015 was stunningly narrow. The 2020 election is for the Tories to lose as much as it is for Labour to win. Something the Tories are more likely to do if they continue to repel voters with their "Nasty Party" tendencies.If the Tories truly believe Corbyn will be a disaster for Britain, then they owe it to save Britain by being less repellent even if it goes against the instincts of their current leadership.

HM Revenue and Customs (HMRC) reopened its investigation
into British customers of HSBC Suisse in February, but has failed to add to the
single prosecution of a tax cheat from the bank. The disclosures have dismayed
MPs who had pressed for further action over the HSBC files, which were first
handed to HMRC five years ago. The tax office has been criticised for offering
an amnesty to hundreds of the 3,600 UK customers it identified as potentially
hiding money in Switzerland. Jennie Grainger, HMRC’s director general
(enforcement and compliance), said: “We have collected more revenue, we now
have £142m, but we have just about exhausted what we have from the data.” Conservative
MP Stephen Phillips, a member of the public accounts committee, said: “HMRC’s
view that it’s OK for people who illegally hid their money in Swiss bank
accounts just to pay the back tax and a small percentage penalty without being
prosecuted sends an appalling message. Rightly, it makes everyone who abides by
the law and pays all their taxes very angry.” GUARDIAN

G4S and Serco, caught
and banned for overcharging, are still being paid for prisoner tagging

G4S and Serco were referred to the Serious Fraud Office for
overcharging the Ministry of Justice for tagging offenders, some of whom were
back in prison or who had already died. Following the scandal, Capita won the
contract — worth £400m over six years — to manage the electronic tagging of
offenders in 2014. But the secondary contract to supply the new generation of
GPS satellite tags has so far failed to deliver, forcing the government to rely
on tags supplied by G4S and Serco anyway. As a result, G4S was paid a total of
£8.7m between March 2014 — when it lost the tagging contract — and February
2015. Serco was paid £4.5m during the same period. Michael Gove, the justice
secretary, told a recent select committee that the procurement had “been deeply
unsatisfactory.” According to the think-tank Reform, prison places are nearly
five to six times more expensive than tagging, costing £73 per prisoner a day
compared with the new GPS tags, which will cost £8 to £16 a day. It also
pointed to US research indicating that the use of tags could reduce reoffending
rates. FINANCIAL TIMES

Trade Union Bill: Recruiters
warn against new strike laws that allow their agency workers to step in

As part of its Trade Union Bill, the government wants to end
the ban on using agency workers to replace striking staff. The government says
its reforms will end unjustified disruption to working people's lives. There
has been a ban on using agency workers in strike action since the 1970s. But
Kate Shoesmith, head of policy at the REC, said: "We are not convinced
that putting agencies and temporary workers into the middle of difficult
industrial relations situations is a good idea for agencies, workers or their
clients." The big recruitment agencies work in countries around the world.
Most have signed up to the International Labour Organisation's convention on
private employment agencies. It states that "private employment agencies
should not make workers available to a user enterprise to replace workers of
that enterprise who are on strike". The UK has not signed up to the
convention. But it is understood that many employment firms are keen to ensure
that they are not seen to be sidestepping their international obligations. TUC
boss, Frances O'Grady, said: "Everyone knows that if you can just replace
strikers overnight, that undermines all the power that workers have to bring
their employers to the table... Imagine the impact on the safety of whole
workplaces run by untrained, inexperienced temporary staff. Think about what
that would mean in education, energy or border control." BBC NEWS

Berlin to push for bank
financial transactions tax to cover all of EU

German Finance Minister Wolfgang Schäuble will push for a
planned European tax on stock and bond trading to apply in all EU countries in
spite of firm UK opposition to the scheme and warnings from banks it would hurt
their business. While only 11 nations — including Germany and France — are
planning to participate in the financial transactions tax, Mr Schäuble said that
this should be seen only as a first stage, and that efforts should then be made
to convince other nations to join. The European Commission first proposed the
tax in 2011, as politicians sought to quell public anger over massive bank
bailouts. Advocates of the measure — which has been strongly pushed by France —
argue that it would force banks and other financial firms to make a fair
contribution to the public purse. Another motivation is to discourage
speculative trading that is not linked to the real economy. But the mooted tax
has become a bogeyman for Britain, which has warned that the original blueprint
for the measure would see UK-based traders hit even though the country has
ruled out participating. FINANCIAL TIMES

UK Financial Investments (UKFI) is the company established
by the Treasury to hold the taxpayers’ stakes in RBS and Lloyds. It has been
warned to remain “ultra-vigilant” after it was revealed some of the City’s
biggest investment banks – including Goldman Sachs and UBS – are charging the
government as little as a £1 fee for work that would normally cost tens of
millions of pounds. Representatives of UKFI told the Treasury select committee
it had paid just £15 for help and advice related to the sale of shares in
Lloyds Banking Group and RBS which would normally have cost around £38m. Oliver
Holbourn, head of market investments at UKFI, said some City firms had even
offered to pay the government to work on its privatisations. The banks,
however, eventually concluded that such arrangements could be an offence under
the US foreign corrupt practices act. James Leigh-Pemberton, the boss of UKFI,
said he assumed the banks worked for £1 because of the caché associated with
such high-profile work. But Conservative MP, Chris Philp, warned UKFI to
proceed with caution: “I’ve never encountered an outfit like Goldman Sachs or
Morgan Stanley acting in a charitable manner,” he said. Steve Baker, another
Conservative MP on the committee, said UKFI needed to give clear answers about
where the investment banking advisers are making money, given the low fees. “I
feel sure that many of my constituents would join me in regarding in the utmost
astonishment that the same organisations that have been fined for repeat
rapacious misconduct are now the jolly good chaps we imagine from the past and
now charging just £1 for their services”.

“tax increases raise £47.2 billion over the Parliament…various tax and spending decisions have indirect effects that raise a further £14.2 billion.”“Budget decisions also imply £3.5 billion of extra borrowing over the Parliament, on top of the £14.6 billion increase implied by our pre-measures forecast.”“Government’s provisional spending assumptions imply that Resource Departmental Expenditure Limits (RDEL) – which cover day-to-day central government spending on public services, grants and administration – would be £83.3 billion higher in total over the current Parliament”Premonitions of a Leftist Corbynite cataclysm? No, the above quotes are taken from the Office of Budget Responsibility’s (OBR) independent analysis of the Conservative government’s July 2015 Budget. The first pure Conservative budget, undiluted by their late LibDem coalition partner, since Kenneth Clarke had his last dram in the Commons in 1996, 19 years earlier.

Those fearing Jeremy Corbyn's tax, borrow & spend proclivities would find him in surprising company: George Osborne. Perhaps they have failed to notice because the Tory Chancellor has repeatedly proved to be a master of misdirection. Not in the way of a top hat and tailed king of conjuring, more like an emperor with no clothes. Both Osborne and Emperor could parade in their nakedness not because the people were convinced they were covered, but because those who should have said they were bare didn’t dare. Like the people in the fairy tale praising the Emperor's dress sense, the 2010-2015 Labour Party didn't dare oppose Austerity for fear of seeming too economically stupid to love it. In both stories it takes someone considered to be a naïve nobody to expose the streakers. To misdirect attention from his overall large tax hike Osborne flourished £24.6 billion in tax cuts. The OBR report stated these were “primarily cutting corporation tax rates, raising the income tax personal allowance and extending inheritance tax relief for main residences”. In 24.6 billion bounds, the Chancellor escaped notice yet again!To misdirect from massive welfare cuts to the poorest, Osborne waved the risibly named “National Living Wage” (NLW) wand. The Tories set the NLW at £7.20 per hour from April 2016, promising it will rise to 60% of the national average (median) wage by 2020. Risible because:a)60% of the median income is a common definition of Poverty.b) By having a single "National" living wage, Osborne ignores wide regional variations in living costs and incomes. According to the Resolution Foundation even by 2020 the NLW will only be 47% of the median income in London.b)The “living wage” is already a well defined and considerably higher amount calculated by the long established Living Wage Foundation. For 2014-15 the Living Wage Foundation set this at £9.15 per hour in London, and £7.85 per hour outside London.Osborne’s high-jacking of the “Living Wage” was his icing on what turned out to be a cow-pat (or was it bull s**t?). The report "Higher ground: who gains from the National Living Wage" by the Resolution Foundation points out what Osborne gave with one hand he took back and more with a wheelbarrow. Cuts to working age benefits, which have mainly been the government subsidy for low paying employers, wiped out many times over what those on low pay gained from the new “National Living Wage”. The Resolution Foundation report states "The NLW only partially offsets the losses low-income households face after the Summer Budget". The graph below shows that this Summer Budget, with its National Living Wage, left the poorest 40% of households hundreds of pounds a year worse off representing a cut of up to 9% in their incomes. The richest 10% are also hundreds of pounds worse off but that represents a tiny fraction, less than 0.5%, of their incomes.

Not only did Osborne pick the pockets of the poor, he also managed to discombobulate employers with his National Living Wage caper. According to Gavyn Davies, hedge fund manager, former Goldman Sachs partner, and former chairman of the BBC, two thirds of corporate profits since 2008 have come from holding wages down:"[If the] decline in the wage share had not occurred, and everything else had (implausibly) stayed the same, then gross profits in the developed economies would have been about one-third lower than they are today and net profits (after depreciation) would have been about two-thirds lower."From this we can understand the bleating about the cost of National Living Wage from top executives of the care sector and the retail and relaxation industries. They fear the profits in their pockets may leak back to their staff in higher wages.

Doubtless some will assert we are all in it together; it's all done for their own good; and the only way the poor can escape being poor is by staying poor.The President of the Institute of Chartered Accountants chimed in with a piece for the CityAM newspaper titled “The National Living Wage could make eradicating the deficit a three Parliament problem”. He provides a reminder that the way things are the prosperity of the nation depends greatly on the poverty of the poor.

But things only stay the way they are until they change. The Tories comfort themselves that Corbyn as Labour leader is absurd. The Spanish author Miguel de Cervantes, author of the novel Don Quixote, wrote: "To attain the impossible one must attempt the absurd". Another author, Arthur C. Clarke, commented on the evolution of revolution: "Every revolutionary idea seems to evoke three stages of reaction. They may be summed up by the phrases: (1) It’s completely impossible. (2) It’s possible, but it’s not worth doing. (3) I said it was a good idea all along."Perhaps this is how it will be with those Labour MPs who scurried for cover for fear of Corbyn's "impossible dream".For a political balance that provides representation for the widest range of people in Britain it was necessary for Labour to move back to the Left. Will Jeremy Corbyn have what it takes to bring positive change first from opposition and perhaps later from power? Now we will have a chance to see. But even if he doesn't, cracks are surfacing in the self-serving assumption of the few that the left-behind are happy to be left behind.

Thursday, 10 September 2015

What's the catch? Investment
banks charged only £1 to “advise” on Lloyds and RBS sell-off

UK Financial Investments (UKFI) is the company established
by the Treasury to hold the taxpayers’ stakes in RBS and Lloyds. It has been
warned to remain “ultra-vigilant” after it was revealed some of the City’s
biggest investment banks – including Goldman Sachs and UBS – are charging the
government as little as a £1 fee for work that would normally cost tens of
millions of pounds. Representatives of UKFI told the Treasury select committee
it had paid just £15 for help and advice related to the sale of shares in
Lloyds Banking Group and RBS which would normally have cost around £38m. Oliver
Holbourn, head of market investments at UKFI, said some City firms had even
offered to pay the government to work on its privatisations. The banks,
however, eventually concluded that such arrangements could be an offence under
the US foreign corrupt practices act. James Leigh-Pemberton, the boss of UKFI,
said he assumed the banks worked for £1 because of the caché associated with
such high-profile work. But Conservative MP, Chris Philp, warned UKFI to
proceed with caution: “I’ve never encountered an outfit like Goldman Sachs or
Morgan Stanley acting in a charitable manner,” he said. Steve Baker, another
Conservative MP on the committee, said UKFI needed to give clear answers about
where the investment banking advisers are making money, given the low fees. “I
feel sure that many of my constituents would join me in regarding in the utmost
astonishment that the same organisations that have been fined for repeat
rapacious misconduct are now the jolly good chaps we imagine from the past and
now charging just £1 for their services”. GUARDIAN

Housebuilder Barratt profits surge
to £566m thanks to housing shortage and Help to Buy scheme

Britain’s largest homebuilder, Barratt Developments, has
reported a 45% surge in profits, as a result of the acute mismatch between
housing demand and supply, as well as the government’s help to buy scheme. Barratt
said it had been “another year of excellent progress for the group” with
pre-tax profits having risen to £566m, compared to £391m the previous year.
Revenues were up by 19% to £3.8bn, in a year when Barratt completed the largest
number of homes since 2008. The company, which is the UK’s largest housebuilder
by volume, said its average selling price had risen 8.7% to £262,500, largely
driven by house-price inflation. The
homebuilder has also been boosted by the greater availability of mortgage
finance, as well as government support. The government’s Help to Buy scheme,
which was unveiled in the 2013 budget, allows homebuyers with just 5% of a
property’s price to buy a newbuild home with the help of an interest-free loan
or an existing home with a government-guaranteed mortgage. The scheme has been
extended to 2020. But very few first-time buyers have benefitted, partly
because the scheme has helped to drive house prices out of their reach. However,
the scheme has been a boon for housing companies, which have seen an upswing in
profits against a backdrop of intense demand for housing and record-low
interest rates. The previous chief executive of Barratt Developments, Mark
Clare, cashed in £11.8m worth of shares when he stepped down in July, after
nine years at the top. GUARDIAN

Britain is sitting on
a new £173bn debt time bomb - and with rates set to rise it's ticking even
louder

The startling rise in debt levels is due to people splashing
out on new cars, TVs, conservatories and home improvements. But with a rise in
interest rates imminent for the first time in more than eight years, fears are
growing that many families will be left struggling with repayments. The total
outstanding bill in consumer credit on the High Street is a staggering £84.4
billion — made up of the record £41.4 billion on credit cards, £6.7 billion on
overdrafts and £36.3 billion on personal loans. A spokesman for MBNA, one of
the largest credit card lenders, said: ‘We’re optimistic about the economy and
its future. Are we fuelling debt? Well, after the credit crunch, governments
asked lenders to help get people spending again.’ Of particular concern are car
buyers with a history of bad debts, who are being offered loans with few
financial checks for new or second-hand vehicles — a return of so-called
sub-prime loans. Car financing debt now stands at £28.7bn. Analysis of debt
levels shows the amount being taken out by homeowners remortgaging to pay for
an extension hit £477 million between April and June — a five-year high. Bank
of England governor Mark Carney has sent a letter to all fund managers asking
for reassurance they are able to deal with an anticipated rush of investors
making emergency cash withdrawals to cover their mortgages, should interest
rates rise. DAILY MAIL

Lloyds trader, fired
over Libor rigging, sues for unfair dismissal

Andrew Reed, who inputted the bank’s submissions to the yen
London interbank offered rate, will have his case heard at a London employment
tribunal on Sept. 16, according to the court schedule. He was fired a year ago
after Lloyds was fined about 226 million pounds ($345 million) by U.S. and U.K.
regulators. The case is one of a spate of unfair-dismissal lawsuits to reach
London courts in recent weeks following investigations at the world’s biggest
banks into the rigging of foreign-exchange markets and benchmarks related to
Libor. Four former Citigroup Inc. currency traders, Carly McWilliams, Perry
Stimpson, David Madaras and Robert Hoodless have all filed claims in a London
employment tribunal. Former HSBC Holdings Plc foreign-exchange trader Serge
Sarramegna sued the bank after he was dismissed. At least 30 traders at a
number of banks have been fired, suspended or put on leave in the last two
years after it emerged the world’s biggest lenders had attempted to collude to
rig currency benchmarks. Banks have paid out more than $10 billion in fines
over the scandal, with criminal investigations in the U.S. and the U.K. still
active. BLOOMBERG

SOURCE TELEGRAPH: Five good things about Corbyn (even if
you're not a Labour supporter)

Did you ever wonder why the banks and the City (who caused
the great recession) were also the largest beneficiaries of re-inflating the
economy with quantitative easing? And did you not perhaps feel a little
aggrieved that, once they’d got what they wanted, they carried on as if nothing
had happened, displayed no gratitude whatsoever and changed their ways not a
bit? Anyway, history has shown that there is alternative in the form of a
massive public works programme. You know, like the New Deal. A response to an
economic calamity that benefits everyone, not just the people who caused it.
Imagine if, instead of a few new towers in the City we had new jobs, new ports,
new roads and new railways. Imagine, if instead of austerity, we had government
spending. You wouldn’t even need to print money to do it. Rather, governments
could borrow it - and at the lowest rates for decades. The Economist recently
described the failure of governments to borrow to build as a “missed
opportunity”, while Standard & Poor’s reckons that, for every 1% of GDP
spent on infrastructure the UK’s economy would grow by 2.5 per cent.

Standard & Poor’s sees clear economic benefits to G20
countries’ increased public spending on infrastructure–with the so-called
“multiplier effect” of an increase in spending of 1% of real GDP running as
high as 2.5 in a three-year period. The multiplier effect is generally greater
in developing economies than for more developed countries; for example, China,
India, and Brazil would all enjoy a boost to GDP of at least double the
increase in investment. For Europe, it’s clear that a concerted effort across
the region would have a greater effect than country-specific increases in
spending. For developed nations, the increase would boost employment
substantially–adding more than 700,000 jobs in the U.S. and about a million in
the EU. In addition to the short-term boost to jobs and aggregate demand,
infrastructure investment often yields long-term benefits by enhancing
efficiency.

In the run up to the Labour Leadership Election, a greater mystery than Jeremy Corbyn's unfathomable popularity was the leap in public declarations of loyalty to the Labour Party. On the day applications to vote for the new Labour leader closed, on 12th August 2015, the Labour Press Team tweeted:

Verification process continues, but total figs of those who applied for a vote: Affiliated: 189,703, Registered: 121,295, Members: 299,755

The Labour List blog stated 400,000 additional people had signed up in time for the leadership election:"Labour had roughly 200,000 members by election day in May [2015], meaning that membership, which now stands at 300,000, has risen by 50% in just three months. In that time, 120,000 people have paid £3 to become registered supporters and 190,000 have signed up to vote through their trade union. That means of the 600,000 eligible to vote, 400,000 have signed up to do so over the summer months."

As a result the Conservatives won the 2015 election with the votes of fewer than one quarter of registered voters! [Tories got 36.9% of the vote, therefore 36.9% x 66.1% = 24.4% of all registered voters].

The fall in voter registration and turnout was surpassed by the fall in membership of political parties. Between the 1970s and 2013 membership of political parties as a percentage of eligible voters fell:

Conservative: 3.1% down to 0.3%

Labour: 1.7% down to 0.4%

Liberal/LibDem 0.5% down to 0.1%

A report by the UK Parliament in January 2015 stated that:“Membership of the three main political parties is at a historic low: less than 1% of the UK electorate is now a member of the Conservative, Labour or Liberal Democrat Party, compared to 3.8% in 1983.”

Thursday, 3 September 2015

90 people a month died
after being found fit for work and losing benefits, government figures show

Between December 2011 and February 2014 2,380 people died after their Employment and Support Allowance claim
was ended. They had received Work Capability Assessments
(WCA) to decide if they were eligible to receive ESA, which replaced incapacity
benefit, income support and severe disablement allowance in 2008. 1,340 of them died after appealing against their decisions, though it is not known what
proportion of those appeals were successful or failed. The figures - and the
time frame they cover - were released after the Information Commissioner ruled
the government should release the statistics, including mortality rates for
benefit claimants, in response to Freedom of Information (FOI) requests. The
data does not contain a breakdown of how the people died. Campaigners have
called for the "tragic" figures to be investigated. The DWP said no
link could be assumed between the deaths and claimants being deemed fit for
work. BBC NEWS

The Government has introduced £40bn worth of new taxation
aimed at the big banks over a decade, through five different taxes including
the levy and the corporation tax surcharge. These bank tax raids on the big
lenders are justified in terms of making them repay the debt to society they
incurred in the crisis: but many of the challenger (i.e. new and small) banks
did not even exist back in 2008 so cannot be blamed for the meltdown. The
challenger banks – along with the building societies – say they are shocked and
angry at the Chancellor’s announcement that lenders making profits above £25m
will be forced to pay an 8 per cent corporation tax surcharge, whilst the
levies on the big banks will be scaled back. The revolt is being led by Paul
Lynam of Secure Trust bank, who chairs the British Bankers’ Association panel
of challenger banks. Lynam said: ‘...the surcharge is an absolute victory for
the lobbyists for big banks... The large banks enjoy a multi-billion pound a
year subsidy by being too big to fail, which means they can fund themselves at
a fraction of the cost of smaller ones. Reducing the bank levy means they will
be subsidised not only by the taxpayer, but by the smaller banks.’ Some suspect
the Chancellor, who is trying to offload the Government stakes in RBS and
Lloyds, wants to cut back the levy to make shares in those two lenders more
attractive. Back-of-the-envelope calculations by industry experts suggest one
of the big banks, HSBC, may benefit to the tune of £470m over five years from
the tax change. DAILY MAIL

Restaurant tipping
abuse under investigation

The government investigation will look at how tips left by
customers are handled after recent reports found that a proportion of tips at
some restaurants were being spent on administrative costs. Most chains use a
"tronc" system, where all the tips are collected together and
distributed evenly through the staff, usually with around 70% going to the waiters,
and the rest given to kitchen and other workers. There is no law regarding how
a tronc is divided, however. Many high-street chains deduct fees from tips.
These include: Ask (8%), Belgo (10%), Bella Italia (10%), Café Rouge (10%),
Prezzo (10%), Strada (10%) and Zizzi (8%). Recently Giraffe has scrapped its
10% admin fee on tips, joining chains like Restaurant Group, Carluccio's,
Garfunkel's and Jamie Oliver's who do not deduct a fee. Research from 2009
found that one in five restaurants did not pass tips to their staff, yet the
vast majority of customers said they wanted waiting staff to receive the money
left for them, the government said. The investigation will consider whether
there should be a cap on the proportion of tips businesses can withhold. But Unite
officer Dave Turnbull said: "Capping admin fees will simply legitimise the
underhand practice of restaurants taking a slice of staff tips and be near
enough impossible to enforce," he said. BBC NEWS

'National living
wage' dodgers face higher penalties

Originally employers had to pay the amount they had
underpaid workers, plus a penalty calculated at 50% of the underpayment, up to
a maximum of £5,000. Under the coalition, the penalty was increased from 50% of
the underpayment to 100%, up to a maximum of £20,000. Prime minister David Cameron
has now said that the penalty would go up again, from 100% of underpayment to
200%. The maximum penalty will remain at £20,000. A new labour market
enforcement director will be appointed to ensure that firms comply with the
national living wage – effectively a higher minimum wage rate for workers over
25. From the autumn, anyone found guilty of non-compliance will be considered
for disqualification as a company director for 15 years. In the past,
relatively few firms have been fined for not paying the minimum wage but ithe
Department for Business announced in February that a crackdown launched in
October 2013 had led to 162 firms being fined for non-compliance, as well as
being named and shamed. Cameron said the new measures were intended to send a
message to “unscrupulous employers” that they would pay the price if they
underpaid their staff. He claimed that the government initiative would ensure
that “people properly benefit from the recovery.” The national living wage, the
surprise announcement in the summer budget, will start at £7.20 an hour from
next April, rising to at least £9 an hour by the end of the decade. GUARDIAN

Tuesday, 1 September 2015

The Tory majority hides what happened when you count individual votes. The Tory rise of 0.8% was less (apart from the LibDems, of course!) than any of the other major parties. UKIP were up by 9.5%, followed by the SNP at 3.1% and the Greens at 2.8%. Even the Labour vote rose by 1.5%. The Big Question is how many of UKIP's votes were for its rightist policies and how many for its leftist, given a lot of their support came from the "left behind", on low incomes, who had previously voted Labour.